Update: Police have recovered the body of a man found in the Utuhina Stream in Fordlands.
Police said a post-mortem examination will be carried out tomorrow to determine the cause of death.
"The walkway running alongside the stream and backing onto Ruth St will remain cordoned off overnight," police said.
Earlier: A body has been found in a stream in Fordlands, Rotorua.
The area around Harold Cres has been cordoned off for a scene examination.
A police investigation is underway, Bay of Plenty Police communications manager Kim Perks said.
In a statement, police said they received a report of the body about in a stream about 11.30am.
"The area, a walkway backing onto residential properties on Ruth Street, has been cordoned off and an investigation is underway," police said.
"The circumstances of the death are unknown at this stage, but if anyone has any information that might assist Police they are asked to contact Rotorua Police on (07) 348 0099."
Nearby residents say they are "freaked out" by the discovery.
"This is a quiet street, there's lots of families here," said one resident.
Another resident Joanne Horton said she had heard the body was found by neighbours who went to go trout fishing.
"A man and his nephew went to get a fish and they saw the body - it was a full grown man," she said.
"We're disgusted something like this has happened here."